JKX initiates enforcing of USD 12 mln award against Ukraine

JKX Oil & Gas (JKX LN) reported on Dec. 16 that it
is filing for the enforcement of an USD 11.8 mln award by an
international court as compensation from the government
of the company’s losses. The February 2017 ruling was upheld by the Kyiv
Appellate Court in July, and the state’s appeal against the latest judgment has
failed, the company reported. 

In the same update, JKX reported on the successful
completion of the workover of its Well-18 in Russia. The current output of the
well is 1,316 boepd, and “production has been slowly increasing,” the company
reported.

Alexander Paraschiy: An attempt
to enforce compensation from the Ukrainian government looks encouraging, but so
far it’s too early to comment on the timing of such compensation. In any case,
this confirms our bullish view on JKX stock.

Meanwhile, the news on the Russian well does not
look encouraging as the commissioned well is so far producing less than the other
three Russian wells did in 1H19 (including Well-20, which is next to undergo
workover, based on JKX’s plan). That suggests the commissioning of Well-18,
with the start of workover at Well-20, would lead to reduced JKX output in
Russia.